The stock market has grabbed the headlines, but it is the reeling credit markets that will get the most government attention in its bailout efforts. Understanding the problems in the credit markets can help you get a better handle on what is driving the current financial crisis.
These vast markets include everything from the trading of 30-year Treasury bonds to investing in securities tied to auto loans. In essence, the credit markets act as a vital lubricant throughout the nation's economy, helping businesses to operate and families to purchase a home or pay for college.
Even if the majority of businesses are fundamentally OK, that doesn't stop people from overreacting. Irrational exuberance on the way up and irrational panic on the way down are all part of market psychology.
GM shares have been trading at 50-year lows this week as credit rating agencies Standard & Poors (MHP) and Fitch Ratings both issued reports expressing concern that GM and Ford Motor (F) wont have enough cash to last through 2009 if sales continue to fall. Since Chrysler is privately held, information available about its true financial condition is not known.
A mans life must be measured
only on his passing
Consider me dead
don’t hold me a wake
judge my deeds
find me guilty and exile me
let the memory be a grain of sand
in the eyes of the travelers
who came so far
to curse me at my grave